USDA’s May Supply and Demand report shows milk production is likely to rise in 2025 and 2026. The May 12th update shows the trend for an expanding milk cow herd and slightly higher milk per cow is continuing.
The larger supply of milk is expected to lower dairy product prices for consumers buying butter, nonfat dry milk, cheese and whey products and farmers are also likely to be paid less for Class III and Class IV milk used to make cheese and butter.
The 2025 import forecast on a fat basis is lowered on reduced expectations of butter shipments. The skim-solids import forecast is unchanged. The fat basis export forecast is raised on competitively priced butter and cheese while exports on a skim-solids basis are raised on increased shipments of whey products, lactose, and cheese. Exports on a skim-solids basis are raised on increased shipments of whey products, lactose, and cheese. Butter, cheese, NDM, and whey price forecasts are all raised from the previous month on recent prices and increased export demand for the second half of the year.
2026 exports are expected to be less than 2025 on a fat basis, but higher on a skim-solids basis due to more whey product exports. Imports are expected to be higher, with more butter and skim solids imports. Domestic use in 2026 is expected to increase on both a fat basis and skim-solids basis.
The 2025 Class III and Class IV price forecasts are also raised. The all milk price for 2025 is increased to $21.60 per cwt. The all milk price in 2026 is forecast to be $21.15 per cwt.
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